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Inescapable Cycle: Bubble after bubble after bubble

[TaM-1277] The Truth About Markets – 18 May 2013

Stacy Summary: Coming to you from the LondonRealTV studio in Shoreditch, we answer questions sent in via Twitter: bitcoin, silver, gold and more.

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RealTV

Keiser Report: Whimsical Price Tyranny

We examine stories about those who, using spoof trades, bogus securities and fictitious capital, steal real wealth and income. They discuss how it is that every benchmark index is rigged and introduce the concept of the ‘bonus benchmark.’ In the second half, Max talks to Dr. Michael Hudson, author of The Bubble and Beyond, about debt and wage deflation and about the intersection of interest rates and wages going back to David Ricardo when wages were measured against the price of bread to today when they are measured against the price of debt.

Banksters throw dust in eyes with benchmarks

‘CANTILLON EFFECTS’ AND THE NONNEUTRALITY OF INTERNATIONAL RESERVES

Stacy Summary: Excellent report by our latest Keiser Report guest, John Butler. I can’t get enough of pieces on the Cantillon Effect,’ first introduced to me by John Aziz. Max had also indirectly identified this phenomenon in arguing that workers should tie their wages to money supply as bankers do . . . via the Cantillon Effect.

But to the extent that this wage convergence process is driven by reserve currency inflation, rather than natural, non-inflationary economic integration, the Cantillon effects discussed earlier result in wages converging downward rather than upward, implying a global wealth transfer from ‘owners’ of labour—workers—to owners of capital.

So-called anti-globalists disparaging of free trade are thus not necessarily barking mad—well, perhaps some are—but they are barking up the wrong tree. The problem is not free trade; the problem is trade distorted by monetary inflation. If you want workers around the world to get fairer compensation for their labour, shut down the reserve currency printing press. And if you also want them to have access to the largest possible range of consumer goods at the lowest possible cost, remove trade restrictions, don’t raise them.

[KR445] Keiser Report: Sacred Dow

We behold the Sacred Dow, worshipped by economists and analysts around the world and to which whole economies and jobs have been sacrificed to keep it rising. They compare the Japanese bond market to Fukushima. Markets have become so distorted by manipulation, they argue that like godzilla, one day the market will go where it needs to go and it will smash down buildings and economies with it. In the second half, Max talks to John Butler of Amphora about confusing price signals caused by market manipulating central bankers and the misallocation of capital this encourages. They also talk about Japan’s economy, Krugman’s bond allegations and Mrs. Watanabe’s gold shopping spree.

“I’ve had enough.”

A debt-ridden father doused himself in petrol and turned himself into a human fireball after being harassed for money by payday loan firms.

Antony Breeze, 36, died after setting himself alight, telling passers-by who tried to extinguish the flames: ‘I’ve had enough.’

In the hours before the tragedy Mr Breeze, who owed around £1,600, was bombarded with text messages about his arrears, an inquest heard.

Physical gold demand was up in the first quarter, even if ETFs kept bleeding

The only bear market in history in which demand is rising and prices falling. “Bar and coin sales, year-on-year, rose 22% in China, 52% in India and 43% in the United States.”

Japanese bond market as new Fukushima

Founder Of Drug Site Silk Road Says Bitcoin Booms And Busts Won’t Kill His Black Market

Stacy Summary: I don’t know why people don’t get this. I suppose they prefer shrieking.

Founder Of Drug Site Silk Road Says Bitcoin Booms And Busts Won’t Kill His Black Market

In a rare (and brief) public statement sent to me, the Dread Pirate Roberts (DPR) said that despite Silk Road’s reliance on Bitcoin, commerce on the site hasn’t been seriously hurt by Bitcoin’s wild rise and fall. “Bitcoin’s foundation, its algorithms and network, don’t change with the exchange rate,” the pseudonymous site administrator writes. “It is just as important to the functioning of Silk Road at $1 as it is at $1,000. A rapidly changing price does have some effect, but it’s not as big as you might think.”

Department of Homeland Security stops Dwolla dealings with Mt.Gox

Stacy Summary: I tell y’all, that fence along the border with Mexico is to keep Americans from escaping. Interesting that it’s DHS doing this. And I thought, according to many shriekers, that it is the CIA running bitcoin . . . obviously, the DHS didn’t get the memo . . .

[KR444] Keiser Report: Decapitated Consumers

We discuss the brainless food of the future that is the consumer of today. From shopping for clothes to buying equities, consumers and investors ask not where the profits or discounts come from. In the second half, Max talks to Mark Campanale and Luke Sussams of CarbonTracker.org about unburnable carbon, wasted capital and stranded assets.

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